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The Balancing Act: The Optimal Assignment of New Players in Sports Leagues

Author

Listed:
  • Huasheng Song

    (CRPE, School of Economics, Zhejiang University)

  • Ruqu Wang

    (CRPE, School of Economics, Zhejiang University
    Department of Economics, Queen's University)

Abstract

In this paper, we investigate the optimal allocation of new players in professional sports leagues. A new player is to be allocated to the teams in a league. The league maximizes the attractiveness of the contests, which is equivalent to suspense and competitive balance in our model. Meanwhile, the teams maximize their winning probabilities. In the static model, we show that it is always optimal for the league to allocate the new player to the weakest team. However, competition between teams for this new player may or may not lead to this optimal allocation. In the dynamic model, we show that allocating the new player to the weakest team with probability one may lead to shirking in the teams in the initial periods; this probability must be low enough to induce full effort from the teams.

Suggested Citation

  • Huasheng Song & Ruqu Wang, 2019. "The Balancing Act: The Optimal Assignment of New Players in Sports Leagues," Annals of Economics and Finance, Society for AEF, vol. 20(2), pages 525-540, November.
    • Handle: RePEc:cuf:journl:y:2019:v:20:i:2:songwangye
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Sports leagues; Competitive balance; Optimal allocation;
    All these keywords.

    JEL classification:

    • J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations
    • Z22 - Other Special Topics - - Sports Economics - - - Labor Issues
    • Z28 - Other Special Topics - - Sports Economics - - - Policy

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